What is LSI in SEO?

Latent semantic indexing helps search engines to find out what a web page is all about. It basically means to you that you shouldn't focus on a single keyword when optimizing your web pages and when getting links.
The web pages on your web site should be related and focus mainly on a special topic while using different words that describe the topic. Use variations of your keyword and synonyms. That makes it easier for search engines to determine the topic of your site.

Latent semantic indexing adds an important step to the document indexing process. In addition to recording which keywords a document contains, the method examines the document collection as a whole, to see which other documents contain some of those same words.

For anyone reading this thread now, Please do not post any further definitions of LSI, it has already been covered.
However, if you have any useful comments regarding its use that have not already been mentioned you are welcome to post them